The US Federal Reserve Is Considering Changing Interest Rate Paths.

Last month, the FED worried that the global economic slowdown and the collapse of the financial market could drag down the US economy and consider changing the planned rate hike in 2016.

The minutes of the meeting are more detailed about the risk of the US economic outlook than the FOMC meeting statement.

The minutes released by the Federal Open Market Committee (FOMC) on Wednesday (February 17th) showed that although members of the voting rights "basically agreed" that they could not assess the risk balance in the economic outlook in the statement, officials observed that if the tight situation in the recent global financial environment continues, it may amplify downside risks.

According to the minutes, although most policymakers still expect to raise interest rates this year, they even discussed whether action was taken at the 26-27 meeting in January, but there are still differences on how to interpret financial market volatility.

After the announcement of the meeting, Wall Street doubted more about whether the Fed would raise interest rates this year.

According to the CME Group, the trend of federal funds rate futures imply that investors believe that the possibility of raising interest rates by the Federal Reserve in December is about 30%, and that the rate of raising interest rates before December is less than 30%.

Before the announcement of the meeting, investors thought that the rate of interest rate hike in December was about 40%.

Fed policymakers said last month that they were worried about commodities when they debated their interest rate outlook.

Falling and financial market turmoil are increasingly shaping the US economic risk.

The minutes of the meeting showed: "participants believe that the overall impact of these events on the prospects of domestic economic activities is uncertain, but they agree that uncertainty is increasing. Many participants believe that these events have increased the downside risks of the US economic outlook."

Fed policymakers who expected to raise interest rates 4 times in December were worried about the consequences of the turmoil in the financial markets, and the turmoil in the financial markets has cast a shadow over the global economic outlook.

Janet Yellen, chairman of the Federal Reserve, said at a congressional hearing last week that the Fed could postpone the rate hike plan to assess the response of the US economy to the current adverse factors.

The minutes of the meeting showed that some participants were worried that the broader effects of the slowdown in China and other emerging economies were likely to be a drag on the US economy; participants acknowledged that further decline in energy prices and continued appreciation of the US dollar could mean that inflation would take longer than expected to rise to 2%.

Economist at Bank of Tokyo-Mitsubishi, Tokyo (MITSUBISHI)

The report says, "the reality is that there are no tools available in their policy toolbox."

Rupkey wrote: "March looks unlikely to raise interest rates, the reason is the market, the Federal Reserve is succumbing to the financial market, no doubt.

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Recent global

The slowdown and the sharp fall in the stock market have prompted more and more investors to expect the fed to abandon the implication of the four increase in interest rates issued in December last year.

Omer Esiner, chief market analyst at Commonwealth Foreign Exchange, said: "the minutes of the meeting show that the Fed's wording is more dovish. In short, it may imply that the possibility of raising interest rates in March will be reduced.

The Fed's policy decision still depends on data performance, so it will focus on the upcoming inflation, wage and employment growth indicators.

As far as the situation is concerned, the market may absorb excessive negative economic conditions, so it is not expected to further raise interest rates this year.

Royce Mendes, chief economist of CIBC Capital Markets, said: "we believe that the Federal Reserve will not raise interest rates until later this year. This year the Federal Reserve will only raise interest rates two times, which is more radical than the market interest rate hike."

Australian Federal Bank (CBA) exchange rate analyst Elias Haddad pointed out that the January conference minutes revealed the cautious tone, highlighting the downward trend of the US economic growth prospects has increased, but it is still expected that the Fed will raise interest rates again in June, which will continue to benefit the US dollar.

After the release of the minutes, USD / JPY fell 114 and the euro / dollar rose.

In late New York, USD / JPY fell 0.3%, to 113.79.

In addition to the Fed's dove meeting minutes, the news that the Japanese authorities may not release water for a while will also boost the yen.